Alcohol Beverage Industry Marketing Pitfalls to Avoid in 2026
POSTED BY Theresa Barton Cray
As we near the close of a challenging year for the alcohol beverage industry, suppliers are understandably looking for creative marketing campaigns to boost sales. Unfortunately, given the highly regulated world of alcohol beverage marketing, creative marketing ideas can sometimes hit the proverbial brick wall of regulatory restrictions. All is not lost, however, and there is still room for creativity provided suppliers work within the parameters of alcohol beverage regulations.
To start, below are some common pitfalls that suppliers should avoid when marketing their alcoholic beverages in California and elsewhere.
Retailer Partnerships
Suppliers should closely examine any new marketing programs that involve or mention licensed alcohol beverage retailers. Partnerships with, or sponsorships of, retailers are in most cases going to run afoul of the tied-house laws in California, and in most other states, which prohibit suppliers from giving (directly or indirectly) money or any other “thing of value” to on- or off-sale retail licensees absent an applicable statutory exception.
The California Department of Alcoholic Beverage Control (“ABC”) interprets the “thing of value” concept broadly, viewing anything from prepaid gift cards to free or discounted event tickets or airfare as potential trade practice violations. Even a social media post mentioning an individual retailer on a supplier’s account is a “thing of value” (i.e., a free advertisement for the retailer), absent an exception that otherwise allows it.
And while there are a number of exceptions to the above rule, including certain exceptions allowing the listing of retailers in association with certain events or permitted non-profit sponsorship, these exceptions are interpreted extremely narrowly. As the ABC recently noted in an Industry Advisory issued earlier this month:
“When utilizing an authorized tied house exception, licensees are responsible for complying with all the requirements, notifications, or other limitations exactly as provided, as each exception is narrowly constructed and may only occur within the parameters of that law. If no exception exists, then an action is always considered illegal…”
Free Goods to Consumers
The California ABC Act bars licensees from giving premiums, gifts, or free goods to consumers in connection with the sale of alcoholic beverages. Although there are a few exceptions to the general rule (e.g., refunds for returned products, consumer contests or sweepstakes, advertising specialties, certain coupons or rebates, charitable marketing), those exceptions are narrow and subject to very specific limitations and conditions. A promotion offering a free gift or some type of bonus with purchase may seem like a great marketing tool, but these types of promotions are permitted only if expressly authorized by (and subject to the conditions of) an applicable statutory exception.
For example, outside of prizes related to permitted contests or sweepstakes or coupons/rebates, any gifts given to a winery’s customers cannot cost more than $1 per item. For beer and spirits, the limits are also different: any free goods offered to consumers must not exceed $3 per item if offered by a beer manufacturer or $5 per item if offered by a distilled spirits supplier.
It is not all doom and gloom, however, when it comes to alcohol beverage marketing! DP&F advises clients regularly on the permissibility of novel marketing programs, identifying areas of risk and collaborating with clients to develop exciting and new programs.
For more information about regulatory restrictions, or to discuss your own novel alcohol beverage marketing initiatives with one of the attorneys on our Alcohol Beverage Law and Compliance team, reach out to Bahaneh Hobel, John Trinidad, or Theresa Barton Cray via the contact form below.
